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NSE Intra-day chart (11 October 2017)
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Market Commentary 12 October 2017
Markets to start in green, IIP and CPI data eyed

Paring all of their initial gains, Indian equity benchmarks ended the trade in red terrain on Wednesday. Selling which crept in final hour of trade mainly played spoil sport for the key gauges and pulled them below their crucial 10,000 (Nifty) and 31,900 (Sensex) levels, as traders opted to book profit at higher levels ahead of Q2 numbers of TCS and Reliance scheduled to be released on October 12 and October 13 respectively. Though, markets started the session on optimistic note, as sentiments remained upbeat with OPEC's statement that India is experiencing some of the greatest structural changes as bold new reforms like note ban and GST have put the country firmly on a sustainable growth path. Some support also came with report that Private Equity/Venture Capital (PE/VC) investments touched a record high of $8.7 billion in the September quarter, a sharp increase over the last year, largely driven by big-ticket transactions. The surge was driven by large transactions, with nine $200-million-plus deals in the said quarter. Adding to the optimism, former RBI Governor C Rangarajan said that he expects that the economy would grow at 6.5% for the year 2017-18. He also said the job opportunities and economic growth of the country are inter-related.  However, markets took U-turn and entered into negative terrain as traders booked profit ahead of key economic data of August IIP and September CPI, which are scheduled to be released tomorrow. Some cautiousness also crept on report that US President Donald Trump discussed a ‘range of options' with his top military advisors to respond to North Korea's aggression and prevent it from threatening the US and its allies. North Korea has fired 22 missiles during 15 tests since February, drawing a sharp reaction from the US and its allies. Sentiments also turned downbeat on report that International Monetary Fund (IMF) pared India's growth forecast for FY18, citing the lingering impact of demonetisation and disruption caused by the goods and services tax (GST), though it expects a revival as structural reforms bear fruit. Finally, the BSE Sensex lost 90.42 points or 0.28% to 31,833.99, while the CNX Nifty was down by 32.15 points or 0.32% to 9,984.80.


The US markets closed higher on Wednesday, after minutes from the Federal Reserve's September meeting suggested caution among policy makers on the next interest rate hike which the market had widely expected in December. Federal Reserve policymakers had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, according to the minutes of the US central bank's last policy meeting on September 19-20 released. The readout of the meeting, at which the Fed announced it would begin this month to reduce its large bond portfolio mostly amassed following the financial crisis and unanimously voted to hold rates steady, also showed that officials remained mostly sanguine about the economic impact of recent hurricanes. On the economy front, the number of job openings in the country fell slightly to 6.08 million in August from a record 6.14 million in July. Some 5.43 million people were hired and 5.23 million lost their jobs. The so-called quits rate among private-sector employees was unchanged at 2.4%. It slipped a notch to 2.1% if government workers are included. Job openings declined for most industries, though the biggest drop was in education. The Dow Jones Industrial Average added 42.21 points or 0.18 percent to 22,872.89, the Nasdaq gained 16.3 points or 0.25 percent to 6,603.55, and the S&P 500 edged higher by 4.6 points or 0.18 percent to 2,555.24.


Crude oil futures extended their gains on Wednesday, after Opec said demand for oil is set to increase in 2018 raising investor expectations that higher demand will rein in excess supplies. Opec indicated that market rebalancing will continue amid forecasts that global oil demand will rise by around 30,000 barrels a day for this year and 2018. Also the Energy Information Administration (EIA) said it expects U.S. crude oil production in 2018 to rise by more than previously expected. The EIA also raised its crude oil price outlook for both West Texas and Brent oil this year and next. Benchmark crude oil futures for November delivery ended higher by $0.38 or 0.72 percent at $51.30 a barrel on the New York Mercantile Exchange. Brent crude for November delivery gained 0.23 cent to $56.84 a barrel on the ICE.


Extending its previous session's gains, Indian rupee strengthened further against dollar on Wednesday, due to sustained selling of the US currency by exporters and banks. Sentiments got some support with oil cartel OPEC's Secretary General Mohammed Barkindo's statement that India is experiencing some of the greatest structural changes as bold new reforms like note ban and GST have put the country firmly on a sustainable growth path. Besides, dollar's slide against some currencies overseas, too gave some support to rupee, though last hour losses in domestic equity markets restricted the further up move. On the global front, dollar was trading at more than one week lows against a basket of the other major currencies on Wednesday amid uncertainty over President Donald Trump's tax plan, while the euro was higher as fears over Catalonia eased. Finally, the rupee ended at 65.13, 15 paise stronger from its previous close of 65.28 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3606.93 crore against gross selling of Rs 4011.06 crore, while in the debt segment, the gross purchase was of Rs 2082.81 crore with gross sales of Rs 359.03 crore.


The US markets extended their gains despite a relatively lackluster day of trade in last session and the major averages climbed to new record closing highs, following the release of the minutes of the Federal Reserve's latest monetary policy meeting, where many participants expressed concern that the low inflation readings this year might reflect not only transitory factors but also the influence of developments. The Asian markets have made mostly a positive start, as the minutes showed there remains a strong degree of caution at the US Federal Reserve over the timing of future interest-rate increases. The Indian market suffered sharp selling in the second half that dragged the benchmarks from record highs to the negative terrain and major averages closed with loss of about a quarter percent. Today, the start is likely to be in green and recovery can be expected with traders getting some support from report that direct tax collections in the first six months of the current fiscal stood at Rs 3.86 lakh crore, growing by 15.8 per cent over the same period last year. Gross collections (before adjusting for refunds) have increased by 10.3 per cent to Rs 4.66 lakh crore during April to September. Also, the newly constituted Economic Advisory Council to the Prime Minister (EAC-PM) wants the government to stick to its fiscal consolidation road map and has suggested that stimulus to the industry should not be at the cost of fiscal prudence. The EAC-PM in its first meeting stressed upon accelerating economic growth and employment. Apart from the macro economic data of IIP and CPI to be released later in the day, traders will be eyeing the second quarter earnings of IT bellwether TCS. The company is expected to post increase in its profit on sequential basis and improvement in margin. There will be some buzz in oil & gas sector stocks, as the government has rationalised the tax rates on upstream oil and gas operations, while the Petrol pump dealers called off their proposed strike on October 13.


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  • SBI is planning to set up country's largest innovation centre at Belapur in Navi Mumbai investing around Rs 100 crore.
  • Axis Bank has held back an amount of around Rs 80 crore even as it completes the acquisition of Snapdeal's payments arm Freecharge in an all-cash deal.
  • Bharti Airtel has entered into a partnership with Karbonn Mobiles to bring an affordable 4G smartphone to the market, effectively at the price of a feature phone.
  • Lupin's US subsidiary, Lupin, Inc. has acquired Symbiomix Therapeutics, LLC. Lupin had entered into an option to acquire the company earlier this year.
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